The Commodity

“The wealth of societies in which the capitalist mode of production prevails, appearsas an immense collection of commodities; the individual commodity appearsas its elementary form.”

Marx is signalling that there is something else going on beneath the surface appearance.

The Commodity is something produced for sale and not for immediate consumption

It has both use-value and exchange-value.

A thing has a use-value if it can find a use.

The use-value refers to the physical properties that make it potentially an object of use.

Something makes all commodities commensurable in exchange.

“Exchange-value appears first of all as the quantitative relation in which use-values of one kind exchange for use-values of another kind” (p. 126)

As a commodity changes hands, so it expresses something about not only its own qualities but the qualities of all commodities, i.e., that they are commensurable with one another.

They are all products of human labour.

Value expresses the fact that the commodity is the product of social labour, of a part of the labour-time of society as a whole, and not simply the private labour of a particular individual. Thus: the substance of value is “human labour power in the abstract”, “congealed quantities of homogenous human labour”, “human labour-power expended without regard to the form of its expenditure” (p.128).

The magnitude of value is determined by the labour-time socially necessary to produce the commodity, defined as “the labour-time required to produce any use value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society” (p.129)

It is the socially necessary definition of labour time that distinguishes Marx from Ricardo.

Exchange-value is the form of appearance of value; it is the representation of the human labour embodied in commodities.

The commodity is a thing (a “use-value”) that embodies a certain portion of society’s labour-time (a “value”).

Commodity values are not fixed magnitudes; they are sensitive to revolutions in technology & productivity.

Wealth is not the same as value: the former is the total use-values, the latter the amount of socially necessary labour time; More productive labour can produce more use-values in the same amount of time – wealth increases, but value remains the same.

Behind the distinction between use-value and value lies that between useful (“concrete”) and abstract (“social”) labour.

Useful labour “is labour whose utility is represented by the use-value of its product, or by the fact that its product is a use-value…i.e. productive activity of a definite kind, carried on with a definite aim” (pp. 132-3)

The value of a commodity does not express these concrete characteristics of particular labours, it expresses the common quality of labour as social “homogenous” labour (abstract labour). The basis on which different useful labours can be compared as simple expenditures of labour time is the fact that the same individual can perform a whole range of different kinds of useful labour. Abstract labour is social labour, i.e. the expenditure of human labour-power insofar as such expenditure is socially necessary.

The ‘reduction problem‘: reducing skilled labour to simple labour independently of the value of commodities.

The value of a commodity does not represent the amount of labour actually expended by a given individual, but that portion of social labour that is credited to that commodity. It is only in exchange that the producer finds out how much of his labour-time was socially necessary. This is precisely what exchange does: it validates the socially necessary character of the labour-power expended in producing a particular commodity as that commodity is compared in the market with others.

The act of exchange (the market) brings together the dual aspects of concrete & abstract labour.

Section 3: The Value-Form, or Exchange-Value

Since value is a purely social phenomenon it cannot find any direct natural expression, but can only be expressed in the relation between commodities.

I have the relative form, you have the equivalent form: the relative value of my commodity is going to be expressed in terms of the value of the commodity you hold. So your commodity is going to be a measure of the value of mine. Turn the relationship around & my commodity can be viewed as the equivalent value of yours.

The imperatives of commodity exchange give rise to money (the universal equivalent).

It is exchange that gives rise to money and not money that gives rise to exchange. It is the proliferation & generalisation of exchange relations that is the crucial, necessary condition for the crystallization of the money form.

A logical argument, rather than an historical argument.

Value is immaterial but objective. Value is a social relation.

Values, being immaterial, cannot exist without a means of representation. All attempts to measure value directly will fail.

“…human labour, creates value, but it not itself value. It becomes value in its coagulated state, in objective form.” (p. 142) Human labour is tangible process, but at the end of the process, you get a thing, a commodity, which congeals value.

Money is itself a form of social relation.

The value of the commodity, which is really simply an expression of the portion of social labour embodied in the commodity, appears to be an inherent and semi-natural property of the commodity, its price.

The exchange relation, which is really only a relation between amounts of social labour embodied in the commodities in question, appears to be a relation that exists between commodities themselves, without reference to the producers.

Section 4: The Fetishism of the Commodity & its Secret

The fetishism of commodities arises from the fact that commodity producing labour is not directly social. Commodities are produced by individuals working independently of one another. Although the total of these individual labours is the total social labour devoted to producing the total social product, these producers do not come into contact with one another until they exchange their products. Hence the social character of their labour only appears in exchange, and they exchange their labour for that of others only by exchanging products.

“To the producers, therefore, the social relations between their private labours appear as what they are, i.e. they do not appear as direct social relations between persons in their work, but rather as material relations between persons and social relations between things” (p. 166)

Thus value appears to be an inherent quality of the product that dictates to the producer rather than vice-versa.

It is the fourth section that clearly differentiates Marx’s theory of value from that of the classical political economists, especially Ricardo.

Marx does not see exchange relations simply as the quantitative market relations between commodities. Marx sees exchange relations as the particular social form through which the labour of producers who work independently of one another without reference to social needs can be brought into relation with one another and so with the needs of society. Thus for Marx exchange relations are a form of social relations of production: the market regulates the interdependence of producers who appear to be working independently of one another.

The idea that exchange relations reflect the amount of labour-time expended on particular commodities was not original: it was central to all of classical political economy.

The idea that Marx introduces is the idea that exchange is a particular system of social relationships and not simply an institution through which prices are mechanically derived from labour-times.

For Marx, value is a characteristic only of a society in which the relations between producers as members of society are regulated through the market.

This has a fundamental effect on Marx’s theory of value. It is through his examination of form of value that Marx was led to argue that exchange value is not an expression of labour-time (of the amount of time actually spent by the labourer), but is an expression of value.

Value, in turn, does not simply express labour-time actually embodied in the commodity (either individual or on average), but the socially-necessary labour-time, the portion of the total labour-time of the society allocated to that commodity, the labour-time of the individual producer in relation to the labour-time of society as a whole. This relationship cannot be found in the individual commodity, or in the relationship of the individual producer to that of the commodity, but only in the relationship between producers that manifests itself in the exchange relation between commodities.

Hence, for Marx the concept of value is not a technological concept, it is fundamentally a social concept: value expresses the social relation between producers.

Thus, while for Ricardo value expressed the labour of the individual producer, for Marx it expressed the labour of the producer as a member of society.

“It is only the expression of equivalence between different sorts of commodities which brings to view the specific character of value-creating labour, by actually reducing the different kinds of labour embedded in the different kinds of commodity to their common quality of being human labour in general” (p. 142).

These points are very important, because a quite different interpretation of Marx’s theory, that equates it with the Ricardian theory, is very common.

Marx’s theory does not see value as inherent in the commodity, in isolation from the exchange relation – indeed that it is not is the core of Marx’s theory of the form of value.

In a capitalist society prices diverge systematically from values because of the tendency for profits to be equalised between different capitals.

It is not true that all things with an exchange-value are products of labour: virgin land can be bought but is not a product of labour, and nor are all products of labour commodities.